What describes short-term credit given by a seller to a buyer?

The term that describes short-term credit provided by a seller to a buyer is commonly referred to as "Commercial Credit." This type of credit allows businesses to offer their customers the ability to purchase goods or services on credit, essentially facilitating immediate sales while deferring payment for a specified period. It is especially useful in business-to-business transactions where cash flow management is crucial.

Commercial credit usually specifies terms such as the balance that can be extended, repayment timelines, and interest rates if the credit is not paid back within the agreed duration. Sellers often use this strategy to encourage sales by providing buyers with the flexibility to pay later, ultimately driving more business to the seller.

In contrast, commercial cards typically refer to a types of payment cards used for business expenses, commission-only sales involve payment structures based solely on commissions earned by sales personnel, and collected funds refer to money that has been successfully received and processed, none of which accurately define the short-term credit relationship between seller and buyer.